Title
Dept/ Agency: Finance
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Purpose: Confirming Bond Sale
Amount to be Financed: $8,000,000.00
Source of Appropriation: Redevelopment Area Bonds
Purchaser: The Prudential Insurance Company of America
Project Information:
(Description/ Project No./Amount Appropriated/Ordinance No.)
RESOLUTION AUTHORIZING AND PROVIDING FOR THE SALE AND ISSUANCE OF NON-RECOURSE REDEVELOPMENT AREA BONDS, SERIES 2026 (930 MCCARTER URBAN RENEWAL, LLC PROJECT) (FEDERALLY TAXABLE) OF THE CITY OF NEWARK, IN THE COUNTY OF ESSEX, STATE OF NEW JERSEY, PROVIDING FOR THE FORM, MATURITIES AND OTHER DETAILS OF SAID BONDS; AUTHORIZING THE EXECUTION AND DELIVERY BY THE CITY OF A MASTER TRUST INDENTURE, A FIRST SUPPLEMENTAL INDENTURE, A PLEDGE AND ASSIGNMENT AGREEMENT, AND SUCH OTHER DOCUMENTS AND INSTRUMENTS AS NECESSARY FOR THE ISSUANCE OF SAID BONDS
Additional Information:
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WHEREAS, on August 7, 2013, the Municipal Council of the City of Newark, in the County of Essex, State of New Jersey (the “City”) via Ordinance 6PSF-I adopted the Newark’s River: Public Access and Redevelopment Plan (the “Redevelopment Plan”), which has been amended from time to time; and
WHEREAS, on August 5, 2020, the Municipal Council of the City adopted Resolution 7R2-e(as) declaring, inter alia, Block 1, Lot 46.02 (formerly Block 1, Lots 30 and 46) (the “Property”) as an Area in Need of Redevelopment pursuant to the Local Redevelopment and Housing Law, constituting Chapter 79 of the Pamphlet Laws of 1992 of the State of New Jersey (the “State”), and the acts amendatory thereof and supplemental thereto (the “Redevelopment Law”, as codified by N.J.S.A. 40A:12A-1 et seq.); and
WHEREAS, 930 McCarter Urban Renewal, LLC, an urban renewal entity (the “Entity”) qualified to do business under and in accordance with the Long Term Tax Exemption Law, constituting Chapter 431 of the Pamphlet Laws of 1991 of the State, and the acts amendatory thereof and supplemental thereto (the “Tax Exemption Law”, as codified in N.J.S.A. 40A:20-1 et seq.) is fee simple owner of the Property and proposes to redevelop same by constructing thereon a twenty-five (25) story mixed-use tower with three hundred thirty-three (333) residential units, twenty percent (20%) of which shall be affordable housing as required by the New Jersey Aspire program, 3,750 square feet of retail space on the ground floor, and approximately two hundred forty (240) parking stalls (collectively, the “Project”); and
WHEREAS, in order to improve the feasibility of the Project, the Entity submitted to the City the Exemption Application (as defined in the hereinafter defined Financial Agreement) in accordance with N.J.S.A. 40A:20-8 requesting a long-term tax exemption and a financial agreement with respect to the Project pursuant to the Tax Exemption Law, which Exemption Application is on file with the City Clerk; and
WHEREAS, pursuant to and in accordance with the provisions of the Tax Exemption Law and the New Jersey Redevelopment Area Bond Financing Law, constituting Chapter 310 of the Pamphlet Laws of 2001 of the State, and the acts amendatory thereof and supplemental thereto (the “Redevelopment Bond Law”, as codified in N.J.S.A. 40A:12A-64 et seq., and together with the Redevelopment Law and the Tax Exemption Law, the “Acts”), the City is authorized to provide for and accept, in lieu of real property taxes, an annual service charge paid by the Entity to the City; and
WHEREAS, on April 20, 2022, the Municipal Council of the City finally adopted Ordinance No. 6PSF-a 04/20/2022 (File ID 21-1901), entitled “AN ORDINANCE GRANTING A THIRTY YEAR (30) YEAR TAX ABATEMENT TO 930 MCCARTER URBAN RENEWAL, LLC, 120 ALBANY STREET, NEW BRUNSWICK, NEW JERSEY 08901, FOR A PROJECT TO CONSTRUCT A NEW (25) STORY MIXED-USE TOWER WITH (333) RESIDENTIAL UNITS, TWENTY PERCENT (20%) OF WHICH SHALL BE AFFORDABLE HOUSING, 3,750 SQUARE FEET OF RETAIL SPACE ON THE GROUND FLOOR AND APPROXIMATELY (240) PARKING STALLS LOCATED ON PROPERTY KNOWN AS 930 MCCARTER HIGHWAY, NEWARK, NEW JERSEY 07102 AND IDENTIFIED ON THE OFFICIAL TAX MAP OF THE CITY OF NEWARK, AS BLOCK 1, LOT 46.02 AND AUTHORIZING THE EXECUTION AND DELIVERY OF A FINANCIAL AGREEMENT AND OTHER APPLICABLE DOCUMENTS RELATED TO THE ISSUANCE OF REDEVELOPMENT AREA BONDS (NON-RECOURSE TO THE FULL FAITH AND CREDIT OF THE CITY), AUTHORIZING THE ISSUANCE OF THE REDEVELOPMENT AREA BONDS IN A PRINCIPAL AMOUNT NOT TO EXCEED $8,000,000.00, AND DETERMINING VARIOUS OTHER MATTERS IN CONNECTION THEREWITH”, (the “Ordinance”), which Ordinance accepted and approved the Exemption Application, the Financial Agreement dated May 27, 2022 by and between the Entity and the City (the “Financial Agreement”) and the Project; and
WHEREAS, pursuant to the Redevelopment Bond Law, specifically N.J.S.A. 40A:12A-68, the Annual Service Charge (as such term is hereinafter defined) shall, upon the recordation of the Financial Agreement and the Ordinance, constitute an automatic, enforceable, and perfected statutory municipal lien on the Property and the Project within the meaning of all applicable law; and
WHEREAS, in accordance with the Tax Exemption Law and the Redevelopment Bond Law, the Financial Agreement provides for the payment of an Annual Service Charge to be made by the Entity to the City (the “Annual Service Charge” and as further defined in the Financial Agreement) and further provides for a pledge of all or a portion of such Annual Service Charge to the debt service on the Bonds (defined below) issued to fund a portion of the cost of the Project (the “Pledged Annual Service Charge” and as further defined in the Financial Agreement); and
WHEREAS, pursuant to and in accordance with the provisions of the Redevelopment Bond Law, specifically N.J.S.A. 40A:12A-65 and 67(a), the City may issue bonds in order to finance a portion of the costs of a redevelopment project, which bonds may be secured by all or a portion of the Annual Service Charge; and
WHEREAS, in order to assist in financing a portion of the costs of the Project, the City has determined to issue bonds in an amount not to exceed $8,000,000.00 (the “Bonds”) to finance a portion of the costs of the Project in accordance with the terms and provisions of that certain “Master Indenture of Trust” (the “Master Trust Indenture”), to be dated the first day of the month in which the Bonds are issued, by and between the City and the trustee named therein (the “Trustee”), as supplemented by that certain “First Supplemental Indenture of Trust” (the “First Supplemental Indenture” and together with the Master Trust Indenture, the “Trust Indenture ”), to be dated the first day of the month in which the Bonds are issued, by and between the City and the Trustee, the Ordinance, this bond resolution (this “Bond Resolution”), the Financial Agreement and the Pledge Agreement (defined below); and
WHEREAS, pursuant to the terms of the Financial Agreement, the Trust Indenture and that certain “Pledge and Assignment Agreement,” by and between the City and the Trustee (the “Pledge Agreement”), and in accordance with the Redevelopment Bond Law, specifically N.J.S.A. 40A:12A-67(c), the Pledged Annual Service Charge (as defined in the Financial Agreement) shall be pledged to the payment of the principal of, redemption premium, if any, and interest on the Bonds; and
WHEREAS, in accordance with the Ordinance and the Acts, the City now desires to authorize and approve the sale and issuance of the Bonds pursuant to the Ordinance, this Bond Resolution, the Financial Agreement, the Trust Indenture, and the Pledge Agreement (the Trust Indenture, Pledge Agreement, Financial Agreement, and such other documents, agreements, instruments, or certificates as may be necessary for the issuance of the Bonds, collectively, the “Bond Documents”),; and
WHEREAS, the City and the Entity have determined to authorize the sale of the Bonds to The Prudential Insurance Company of America (the “Purchaser”) upon satisfaction of the conditions precedent to the issuance of the Bonds set forth in the Trust Indenture; and
WHEREAS, in connection with the sale and issuance of the Bonds, the City also desires to approve and authorize the forms of, and the entering into, execution and delivery of, the Bond Documents and such other instruments, opinions, affidavits, certificates, resolutions, documents, agreements, or other papers as may be deemed necessary for the issuance of the Bonds.
BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, IN THE COUNTY OF ESSEX, STATE OF NEW JERSEY as follows:
1. The above recitals to this Bond Resolution are incorporated herein as if set forth in full herein.
2. The City hereby authorizes the issuance and sale of the Bonds in the principal amount of not to exceed $8,000,000.00. The Bonds shall be designated “Non-Recourse Redevelopment Area Bonds, Series 2026 (930 McCarter Urban Renewal, LLC Project) (Federally Taxable)”. The proceeds of the Bonds shall be used to (i) pay a portion of the costs of the Project and (ii) pay for the costs of the issuance of the Bonds.
3. The Bonds will be dated as of their date of delivery and will mature no later than thirty (30) years thereafter, subject to any prior mandatory sinking fund redemption and in the amounts set forth in the Trust Indenture. The Bonds shall bear interest at a rate not to exceed six percent (6%) per annum. Interest on the Bonds shall be paid as provided in the Trust Indenture.
4. The Bonds shall be secured by, inter alia, the pledge and assignment of the Pledged Annual Service Charge as shall be provided in the Pledge Agreement and the Trust Indenture, and the full faith and credit of the City shall not be pledged to the payment of the principal of and the interest on the Bonds. The Bonds shall constitute non-recourse obligations of the City and shall not be considered to be direct and general obligations of the City.
5. The Trust Indenture pertaining to the Bonds shall be substantially in the form attached to this Bond Resolution as Exhibit A-1 and Exhibit A-2 and made a part hereof, and the Mayor, Deputy Mayor, Acting Director of Finance and Interim Chief Financial Officer, the Business Administrator, and the Clerk of the City (each an “Authorized Officer”) are each hereby authorized to execute and attest, as applicable, the Trust Indenture with such changes, revisions, or alterations thereto or insertions therein as may be approved by the officer executing the same after consultation with the City’s Corporation Counsel and/or Bond Counsel (as hereinafter defined), such approval to be conclusively evidenced by the execution thereof.
6. The Pledge Agreement from the City to the Trustee assigning the Pledged Annual Service Charges as security for Bonds shall be substantially in the form attached to this Bond Resolution as Exhibit B and made a part hereof, and the Authorized Officers are each hereby authorized to execute and attest, as applicable, the Pledge Agreement with such changes, revisions or alterations therefor as may be approved by the officer executing the same after consultation with the City’s Corporation Counsel and/or Bond Counsel, such approval to be conclusively evidenced by the execution thereof.
7. The Authorized Officers are each hereby authorized, if necessary, to execute and deliver, on behalf of the City, one or more bond placement agreements, contracts of purchase, bond purchase agreements or sophisticated investor letters for the placement, sale, and purchase of the Bonds (collectively referred to herein as the “Purchase Agreement”), with one or more entities (the “Purchaser(s)”) designated by the Redeveloper and the City, which may be a construction lender, permanent mortgage lender, third party investor, an entity related to the Redeveloper, or an entity to be determined by a certificate of award (the “Award Certificate”) executed by an Authorized Officer, in consultation with the City’s Municipal Advisor (the “Municipal Advisor”), the City’s Corporation Counsel and/or Bond Counsel, the approval thereof to be conclusively evidenced by such Authorized Officer's execution thereof, for the purchase of all, but not less than all, of the Bonds being sold. A copy of the Purchase Agreement, if any, shall be filed upon execution with the City Clerk’s office for the records of the City.
8. Wilentz, Goldman & Spitzer, P.A. is hereby confirmed as bond counsel to the City (“Bond Counsel”) for purposes of the sale and issuance of the Bonds. NW Financial Group, LLC is hereby confirmed as municipal advisor to the City (the “Municipal Advisor”) for purposes of the sale and issuance of the Bonds. An Authorized Officer is hereby authorized to appoint a Trustee, bond registrar, and paying agent for the Bonds.
9. The Authorized Officers are hereby designated, authorized, and directed to execute and deliver any and all Bond Documents and perform or determine any other matters or details relating to the Bonds, to do or perform or cause to be done or performed any and all acts as such officers or the City’s Corporation Counsel, the Municipal Advisor, and/or Bond Counsel may deem necessary or appropriate in order to effect the proper issuance, execution, attestation and delivery of the Bonds.
10. Capitalized terms used in this Bond Resolution and not otherwise defined shall have the meanings ascribed thereto in the applicable Bond Documents.
11. This Bond Resolution shall take effect immediately.
STATEMENT
Resolution authorizing and providing for the sale and issuance of Non-Recourse Redevelopment Area Bonds, Series 2026, providing for the form, maturities and other details; authorizing the execution and delivery of a Master Trust Indenture, a First Supplement Indenture, a Pledge and Assignment Agreement, and such other documents and instruments as necessary for the issuance of said bonds.